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January 9, 2011 / passiveprogressive

US Government: more perfect unions

I wanted to write a quick post about an article I just read in The Economist. As is so often the case in these blurb articles, the topic could be easily summed up in one graph:

Interesting.

It’s interesting that the public sector has paradoxically allowed unions to flourish, even after Ronald Reagan made it the federal agenda to pit the government against unruly workers. Indeed, his dissolution of PATCO (the Professional Air Traffic Controllers Association) in 1981 shows up on the graph as over 13,000 union members were fired.

Unions and Inflation

According to the Federal Reserve, inflation is under control. However, there is a large segment of the American public that believes otherwise. Investments in gold and other commodities with “real” value signal that people are looking for ways to invest other than the dollar. Or, perhaps more accurately, places other than the stock market.

Many remember the >5% rate of inflation in 2008 and see the dollar as an unsafe option. Regardless, employees in unions will be far more likely to fare well during times of inflation than those without union protection.

Take the example of Europe and the U.S. back in 2008: unionized workers received pay increases equal to that of the rate of inflation (then up 3.4% from the previous year). In the U.S. however, workers received less relative to the inflation rate. Economists typically argue that higher wages mean higher production costs, leading to a vicious cycle of price-increasing inflation.

However, there is a beneficial side to having a workforce that isn’t worried about reduced pay due to inflation: consumption would hypothetically stay the same. This lack of a social safety net could be what’s contributing to more conservative spending patterns and lower sales (see an article on consumer frugality).

Nonetheless, government employees are not the public at large, and they don’t have the same overall influence as private sector employees.

The Good, the Bad, and the Ugly

In most minds, this debate would come down to the idea that we ought to have well-paid public servants vs. an efficient government.

But the issue goes deeper than this; unions also benefit workers through lobbying for post-employment compensation. Certainly there are merits to retirement plans and pensions, but they can also be sources of problems. Generational gaps can cause large fluctuations in the amount of post employment dollars that must be paid – certainly a looming problem in a country of Baby-Boomers and their children.

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January 8, 2011 / passiveprogressive

Arts and Crafts Time: making a new book bag for cheap

Dirty and threadbare, my old North Face backpack is a sad sight. Finally decided to retire it this week after eleven years (I’ve had it since fourth grade!) – but this left me in a pricey predicament.

After shopping around locally, it seemed as though most quality backpacks were in the $70-$90 range. This wouldn’t be such a bad price if these bags were to last ten years, but somehow the lightweight nylon just doesn’t seem as durable as canvass.

In any case, I decided to set out to see what exactly makes a bag so expensive by making one myself.

I’ve always been a fan of messenger bags. Many of my German friends pointed out Freitag as an excellent brand. Basically, they take used tarpaulins off of trucks and turn them into bags. For more information on the process, check out their “about” page.

Just one problem: Freitag’s products cost a fortune.

A Freitag Bag. Price: upwards of $150.

So I decided to shop around for my own sources of vinyl and came across Sunraise Printing in nearby Hadley, MA. I got a small sheet of vinyl to start with, and the manger suggested I come back later if I wanted more. The sheet he gave me had a few ink smudges on it, but was otherwise intact.

Here’s a full list of the materials I used:

  • 3′ x 6′ piece of vinyl.
  • Adhesive Velcro
  • Reflective tape
  • An old karate belt
  • White and green thread
  • Plastic buckles

Psyched by free materials I returned home and drew up some grand plans:

I drew up the pattern for my messenger bag before beginning construction.

 

Sewing was often difficult because I had to sew through up to four layers of fabric at a time. If you plan on selling through vinyl, be sure to first start off turning the sewing machine by hand rather than using the electric motor. Also, I used denim needles which are thicker and more difficult to break. But if I had the option, I would definitely have used a larger upholstery machine.

I added a few features that I thought would be nice: reflective tape, an adjustable strap, and a black stabilizing strap for when I ride my bike. Overall I’m very please the results:

 

In retrospect though, I would’ve changed a few things. If you plan on making a bag yourself, pay attention.

  1. If you want the type of messenger bag that hangs across your back as opposed to the type that hangs from your shoulder next to your hip, be sure the buckle for the strap will fall across your chest and not your shoulder. The strap buckle on this bag sometimes it’s my collarbone, making it a little uncomfortable if I’m just wearing a T-shirt.
  2. Vinyl is difficult to sew on, so don’t bother using any fancy stitching, such as a chain stitch. Even a simple zigzag was sometimes too much for my sewing machine to handle.
  3. Make the strap continuous across the top of the bag. I basically cut my strap in half, and then sewed the ends  to the sides the bag. This works just fine, but I think having a continuous strap would make the flap fold more cleanly.

Overall, the bag was a lot of fun to make and I might attempt another one just to see the improvements I could make. What was once a misprinted vinyl sign waiting to rot in a dump for a few hundred thousand years is now bookbag that I can use on a daily basis. Now get out there and start your own!

December 27, 2010 / passiveprogressive

New Year’s Resolutions

We all make them. It’s strange to think that an abstract date could have such an impact on the way our world works, but as I saw with some easy browsing on Google Trends, this is indeed the case. Google Trends records the amount of search traffic and then presents it in graph form, relative to the previous day’s searches. The colored terms at the top of the graph are the exact phrase being typed into Google. They provide insight into what’s on everyone’s mind.

Spikes vs. Curves

You’ll notice on each of the charts that there are New Year’s, Thanksgiving, Summer, and other spikes. These seem to signify the amalgamation of conscious efforts in society as a whole. Take the concept of New Year’s resolutions: everyone makes a conscious effort to change something about their lives. This results in a short burst of interest that wanes fairly quickly.

Curves on the other hand, such as a decreasing interest in employment seem to represent phenomena based on much deeper motivations in the collective psyche.

This is occurrence is demonstrated in both the “employment” and “diet & exercise” graphs: a general decline in interest towards the end of the year (Q4: October-December). Perhaps it’s the season or a general fatigue, but this curve is much longer than the boost we gain from momentary self-directedness.

1. Employment:

Across multiple search terms, employment was on the minds of many directly after New Year's.

 

 

Notice how the “News Reference Volume” portion of the chart clearly delineates the beginning of the recession. Interestingly, it seems as though in most years, the spike that occurs after New Year’s is not abnormal: it’s almost indistinguishable from the average peaks throughout the year. However, the year after the recession began (2008 –> 2009), this spike was abnormally high. More people unemployed mean more job applicants, right?

Perhaps.

The following year doesn’t demonstrate the same spike however – most probably a representation of either improving employment, discouraged worker effect, or people realizing that you can’t get jobs by just googling them.

For college students there’s the internship:

 

Internships have a much more dynamic (though predictable) trend than the job market as a whole.

 

Notice the slight bump during thanksgiving, and then the abrupt climb after New Year’s. Expect some more competition if you wait until January to figure  out June.

2. Diet & Exercise

About 2/3 of adult Americans are considered to be overweight or obese. The good news is that most people seem to know it. However, these graphs seem to give credence to the idea that we let our awareness of fitness slip during the holiday months. Additionally, it seems that for most people the interest in diet and exercise will wane by the end of January.

Again, this doesn’t mean people are simply slacking off, most likely a certain percentage have settled into a workout or diet routine.

Perhaps the most common new year resolution, clearly reflected in google searches.

3. Smoking

 

 

Despite the erratic New Year’s spikes, it’s nice to see a general downward trend here (I’m assuming this means less people need to quit in general).

Trends for the terms "quit smoking" and "nicotine" seem to corroborate the common New Year's resolution of quitting for good.

4. Getting Happy

 

 

It wasn’t that long ago the Seasonal Affective Disorder was consider bunk by Psychologists. Now, Google Trends paints a pretty clear picture of its existence. Noticed the decreased search traffic during the summer months, and then the increase during winter. The big dent of course is Christmas week –  and let’s be honest, while some families might make us insane, traveling and Christmas mean that everything is temporarily put on hold.

Maybe not so much a spike in depression searches as a return to normal after New Year's.

 

 

December 27, 2010 / passiveprogressive

Sick days aren’t just for kids.

I woke up with a cold this morning: ominous burning at the back of the throat, runny nose, and a slight fever. Fortunately, I’m a student on winter break so I don’t have to work (even if I did have a job, It’s Christmas and a weekend). Unfortunately, it isn’t pleasant to be sick on Christmas.

But, let’s assume it wasn’t a holiday and I was working full time. There are numerous other developed countries I could have be born in, but mine (USA) specifically does not guarantee any number of sick days or paid sick-leave.

I think that’s a problem, but not just in the soppy union-loving way of most liberals: no sick days hurts business productivity.

Source: The Baseline Scenario

What you see in this chart is the number of paid sick-days in light blue, and the number of paid sick-leave (for longterm illnesses) days mandated by law.

Out of these developed countries, the US has put most of its faith in corporations to decide just how many days off workers receive – that’s not to say they receive zero. In many cases, companies will decide to have fairly liberal amounts of sick leave, but most often these are white collar positions.

While its important for white-collar workers to have the flexibility to stay home and prevent the transmission of illness to others, it’s even more essential for those working in the service industry to have that ability. In many cases they don’t.

Why? Employees working in service industries come into contact with a wider range of people, furthermore they don’t have the ability to track the spread of a disease. In an office workspace, even if others are infected, they can be warned about the threat of flu within the company and be advised to seek vaccination.

Take the example of Wal-Mart:

Sick days are permitted, but each counts as a demerit. Too many sick days results in termination from the job. The problem here is that there is no psychological buffer zone between taking a legitimate sick day and doing something that deserves a demerit – punishment. This results in workers coming in sick, handling goods that are then spread throughout the home, exchanging currency, etc.

It’s easy to see why someone working in service would make an excellent vector for disease.

Wal-Mart sick day policies are just one way in which the free market concept of labor fails in finding the most efficient option. Instead of simply maximizing efficiency through making sure the most employees are present, we need to consider the quality of work that people can do while sick. Furthermore, we need to consider the damage one employee could do to another person with a weak immune system.

Of course, the other side of the argument is that missed work days cost employers money. Here’s the problem though: adults managed through high school, and if there’s a system of tardies and absences in place to beat, you can bet they will. The solution? Allowing a certain number of work-at-home days without consequence might be a good first step.

This might seem like a long-shot for service jobs such as cashiers at Wal-Mart, but believe it or not most retail companies have online training courses that need to be completed on a regular basis.

Side note: as a cashier I did this for nine months, and and was mind-numingly boring.

But completing training courses at home while sick could be a good compromise for companies with fairly strict attendance policies. Then again, HR departments that treat their employees like cattle might not be trying to climb high in the tree of knowledge and innovation.

Fortunately for me, I’m sick (and can therefore go to Wal-Mart worry free). The rest of you had better use hand sanitizer the next time you visit a workplace with poor sick-day policies.

December 16, 2010 / passiveprogressive

Remittance Corridors

Here’s a first draft of an info-graphic I’ve been trying to get down for a while: how much it costs to send money from some parts of the world to others.

This chart is by no means complete, in fact one of the problems I’m currently facing is how to untangle the mess of arrows so that I can represent over 100 data points.

The world average for remittence prices is approximately 8.8% – though this varies widely. Also, I the World Bank seems to be off a decimal place in the 1st quarter % column. I’ll try to get them to fix that tomorrow.

 

 

November 26, 2010 / passiveprogressive

Time is Money: Cell Phone Minutes as a New Currency

Talking with other travelers while on the road is probably one of my favorite ways to learn about new ideas and gather material to write about. I heard about the mobile banking phenomenon from Jason, an American teacher from Colorado via Costa Rica.

While online purchases have increased dramatically in developed countries over the past decade, little has changed by way of how physical, person-to-person transactions take place. Cash transactions date back almost to pre-history, and the credit card that we now consider modern has changed very little since the 1950s.

But while the “developed” countries lag behind in forming better currency systems, third world countries have come up with an interesting solution that was undoubtedly an invention spurred by necessity: cell phone currency.

The M-currency movement began in the Philippines circa 2005 with the companies Globe Telecom and Smart Communications. Other companies such as M-Pesa, which started in Kenya, have been expanding into the mobile currency market. During the 2008 election violence in Kenya, mobile minutes were considered extremely valuable, to the point where they became a sort of currency. M-Pesa allows individuals to transfer both money and minutes to others with cell phones.

Imagine, instead of swiping a card, sending a code that gives the other user minutes. Later, Vodafone introduced an online account system that could hold up to £ 380 in actual currency.

Why this is useful:

Remittences from developed countries to the third world amount to about $414 Billion dollars per year, which equates to roughly 1% of World GDP. Unfortunately for migrant workers, it’s often necessary to pay stiff fees to unreliable transfer agencies.

For example, the cost of sending the equivalent of $200 from Tanzania to Kenya is $47.27 (about a quarter of the original sum).

But beyond remittances, M-Banking has huge potential in the micro-credit industry. Finally, there is a reliable way to transfer funds back and forth between rural and urban areas regardless of local technology (excepting the cell network of course).

Problems:

Hackers: As with all currency systems, there are ways to counterfeit  and subsequently devalue electronic currency. In the UK, power companies recently switched to a meter system based off of smart-cards that were designed to produce an algorithm-based code the the meter would recognize when the card was inserted.

Sure enough, someone managed to discover the algorithm that was used to produce electricity codes and began creating counterfeit cards, selling them for have the price. Power companies would have to update the hardware in their meters every time hackers discovered the new algorithm.

The codes created by service providers could be hacked in the same way, though this would be easily solved because the part of the system that validates the code is on a regional server that could easily be updated on a regular basis (though this would probably render unused codes invalid).

Regulation: So far, it seem as though the banking industry and governments don’t know what to make of this phenomenon. Most of the time, the amount transferred is minuscule, though collectively the transactions certainly add up. Also, making sure rates are fair, and being able to trace transactions remain challenges for the industry.

Final Word:

What’s the value of convenience? Most American credit card holders are willing to put up with exorbitant interest rates, policy changes, and seemingly random sets of fees, but for what? The original attraction of the credit card was the ability to pay at any number of locations without carrying cash. Now, the ability to take out short-term loans for purchases is also considered an essential of American life.

I have to wonder though, if short term credit were combined with cell-based currency, would we give up plastic for our phones?

November 23, 2010 / passiveprogressive

The Ire of Ireland: Big Bonds from other Countries

The debt crisis in Ireland has caused some alarm amongst investors this past week, making many wonder if another nation has joined the ranks of Greece and Italy as Europe’s worsening economies.

There is a lot to read out there on the subject, but I wanted to contribute a simple graph to this discussion. It show the bond holders by nation, and the relative size of their investments. At this time many Irish are wondering how long they will be stuck paying off debts to this holders, so it’s helpful to see where the funding has come from.

The biggest annoyance – which might be an understatement – for the Irish is that as opposed to the US banking crisis where the failing banks were within the United States, the Irish bailout will likely go to bond holders outside of the country.

Of course, because the bailout is coming form the IMF (and the IMF gets 20% of its funding from the US), it will really be citizens of the United States who bear the brunt of Ireland’s default in the short term. In the long term however, many Irish are simply asking how many generations will be paying off colossal amounts of debt.